I'm not going to get into the nitty gritty of telling you whether I believe investing in international stock is smarter than investing your life savings in some new-fangled company that makes silk pencils. Of all the financial decisions you will make over your life, this one is a no-brainer. Every time you get paid, take ten percent of that check and put it in an emergency account. It doesn't count for retirement, it's not used for bills, and it's not something you tap into when you decide that you really, really, really, really need an automatic lollipop maker. It's something that will give you peace of mind. Having an emergency backup account to use if the car dies, or your spouse needs someone to go with them to chemotherapy, or you need to go to a different job, or the roof leaks. this emergency account lets you take care of unforseen expenses and still enabling you to pay bills, save for retirement, and make investments. It will relieve your day-to-day financial stress as much as anything short of winning the Super Six.
Financial Health for Mental Well-Being
Recently Answered
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Dr. Michael Roizen, MD , Internal Medicine, answeredWhile we know that financial burdens can weigh us down, a lot of us would like to ignore the issues until a crisis happens - simply because we don't know all that much about it. As you know with your body, the smartest approach is to think about your health all the time - not a few minutes before the ambulance arrives. So instead of burying your head, apply some standards of health to your financial attitudes. Overspending is like overeating (serious aging or a serious price to pay with no easy answer if it gets out of control). Day trading is like binge eating sugar and saturated-fat-laden foods (feels good at the time, but not so much over the long haul). A retirement account is like exercise (do a little bit along the way and the long-term benefits are exponentially greater than the investment). The fact is if you treat your money with the same respect and care you ought to treat your body, then there's simply a decreased chance you're going to need financial CPR.
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Dr. Mehmet Oz, MD , Cardiology (Cardiovascular Disease), answeredIt's a pretty good indication that you have a money problem if...
- You rank money ahead of health, love, family, and friendship.
- You buy things just to impress others.
- You can't stand to save, so you spend any extra money at the end of the month.
- You feel guilty for spending money on necessities.
- You believe money can solve all problems.
- You can tell us - to the penny - how much you're carrying in your purse or pocket.
- You constantly pick up the bill at restaurant or bars just to be appreciated. -
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Dr. Mehmet Oz, MD , Cardiology (Cardiovascular Disease), answered
Like so many other health issues, this one also starts in the brain - more specifically why we're hard-wired to react about money. For our stone-age ancestors, survival belonged to the strongest and the fastest. He who grabbed the honey got the honey. He who killed the beast ate the beast. He who flexed his pecs got the woman and the kids to propagate the family name and traditions. Thus, we didn't inhibit our risk-taking behavior with the guidance of our risk-balancing prefrontal cortex. Instead, we reacted - that allowed us to survive. In today's world, that means (especially when you are young) when you see something like a $150 pair of designer jeans you think you'd like to wear, you buy them without the prefrontal cortex telling you.
Today, the means of survival - food, clothing, and shelter - don't stem from the size of your muscles, but rather the fatness (or thinness) of your wallet. Because of that, money has come to have many uses and meanings. We want money, for example, for security, power, love, and freedom. We also use it for such things as comfort, knowledge, even sexuality. In fact, we think it makes us more beautiful, and that's how we act. More importantly, the lesson we learned about money from our ancestors is part of the very reason why we have money problems today - we didn't use our prefrontal cortices to survive and thrive.
You can get a lot of insight into how we respond to money by looking at how certain parts of our brains light up when exposed to certain stimuli. For example, we know that in some patients who took Parkinson's medication that increased dopamine, it also stimulated shopping and gambling compulsions (the reward center at it again). We also know that certain areas of our brain also kick into high gear when we see people who are above us in the social hierarchy, further indicating that our response to certain issues of money and status are hard-wired into our brain..
Curiosity, financial risk-taking decisions, financial risk-taking decisions controllers, sociemotional networks, cognitive-control network also reveal that making a donation (even a couple of pennies) activates the brain's reward center - giving you a boost of dopamine. When you help others, the primitive part of your brain lights up to experience pleasure. -
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Dr. Mehmet Oz, MD , Cardiology (Cardiovascular Disease), answered
Let's assume you've already set aside ten percent of your paycheck for emergency funds. Take another ten percent and put it in a retirement account - nothing gives you the freedom to follow your passions and to relieve stress than having a retirement fund (often added to by an employer). This plan means you have to live below your paycheck and may need to budget carefully so you can enjoy these freedoms.
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Dr. Michael Roizen, MD , Internal Medicine, answered
Men and women have decidedly different views about money. These gender differences are probably rooted in our evolutionary past when men did the hunting and women the gathering. Today's modern man, like his stone-age ansestor, doesn't think twice about going out and bagging a new car, then proudly coming home with his trophy, yelling, "Honey, come down here and look at the new SUV I got you." To which his wife might respond, "Why didn't you ask me what I wanted? I thought we were a team." Which might trigger him to ask, "What, are you my mother?" It's no wonder then that financial problems are among the most common reasons for divorce. Some research shows that one-quarter of all married couples divorce because of financial issues, yet nearly 60 percent of couples say they rarely disagree about money and were doing just fine with their finances.
The X factor (or XX and XY factor, if you will) in financial issues is that many of us have bank accounts that are like conjoined twins - they're fused together with another person's account. No longer can you make decisions about (and be responsible for) how your money is spent. Many times, your money becomes our money, and that money is also responsible for taking care of the milk-needing and Wii-wanting rugrats.
That, to say the least, complicates things. He may be a saver; she may be a spender. He may like to spend money on a big-screen TV; she may like to spend on a Starbucks habit. He may like season tickets to the local baseball games; she may like a spa vacation (or vice versa). It should be no surprise that people often rank personal finance issues as the number one source of stress. Concerns about personal finance are five times greater than those about health. And to tie the health and money issues together, people have been shown to be more likely to deal with financial stressors by engaging in unhealthy behaviors (like smoking, drinking, or going on the fried chocolate-doughnut diet). -
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Dr. Philip Lisagor, MD , Thoracic Surgery (Cardiothoracic Vascular), answered on behalf of The Rest of Your Life (ROYL)See All 2 AnswersRetirement living is complex. Planning for who you want to be, what you want and can afford, where you want to be and how it will occur are critical issues that must be given time to think through. Many factors affect people's retirement decisions. Utilizing a retirement checklist can help you track your progress and add new items to your account. -
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Dr. Philip Lisagor, MD , Thoracic Surgery (Cardiothoracic Vascular), answered on behalf of The Rest of Your Life (ROYL)See All 2 AnswersYou could take the following steps when developing a financial plan for retirement or death:
- Establish goals
- Gather data
- Analyze and evaluate your financial status
- Develop a plan
- Implement the plan
- Monitor and review the plan annually and make needed adjustments
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Dr. Philip Lisagor, MD , Thoracic Surgery (Cardiothoracic Vascular), answered on behalf of The Rest of Your Life (ROYL)Financial planning for retirement or death has the following benefits:
- Making sure your money will last long enough
- Caring for aging parents or a disabled child
- Funding education of children and grandchildren
- Leaving a financial legacy
- Philanthropic donations
- Your financial planner could coordinate with your lawyers, accountants and insurance agents to protect you and your family and loved ones
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Dr. Philip Lisagor, MD , Thoracic Surgery (Cardiothoracic Vascular), answered on behalf of The Rest of Your Life (ROYL)A financial planning checklist for retirement or death may be done with a financial planner and/or an attorney. It could include:
- Overview of your financial information
- Financial inventory sheet
- How you will pay for end of life care
- Medicare assistance
- Reverse mortgages
- Area agencies on aging
- Resources for veterans
- Specialized support organizations